Fraud and Mental Illness
It has been suggested that fraud offending is often underpinned by psychiatric and psychological issues. However, the link between fraud offending and psychopathology is under-researched. It is hard to know the proportion of fraud offenders who suffer from some form of mental illness as only a small minority of them is ever psychologically or psychiatrically assessed. The ways in which researchers have suggested that mental illness may contribute to the commission of fraud are summarised below.
What is fraud?
Fraud includes many offences involving deception, including theft, conspiracy, embezzlement, misappropriation, collusion and false representation. Fraud leads to personal gain and loss to someone else. The theoretical literature surrounding fraud offences conceptualises the ‘fraud triangle’ which consists of motivation, opportunity, and rationalisation. Motivation may be a need for material gain due to debt, addiction or a desire for more money. Motivation may be non-material in nature, such as the ‘high’ achieved by successfully deceiving others. Opportunity is related to having access to objects and may be opportunistic or planned. Rationalisation refers to justification of a person’s actions through a process of ‘neutralisation’ which places psychological distance between them and the victim. The offender may tell themselves something along the lines of, ‘I deserve this more than they do.’
Fraud and mental illness
It is difficult to assess the extent of the connection between fraud and mental illness is as very few offenders found guilty of fraud are subjected to psychiatric or psychological assessments. However, there are some cases documented which establish a link. Psychiatric motivators for fraud have been broadly placed in two categories: financial strain and ego enhancement.
Personality disorders, particularly Anti-Social Personality Disorder and Narcissistic Personality Disorder, have long been associated with fraud and other dishonesty offences. Fraud can also be associated with pathological lying, which can be a symptom of an underlying disorder or a disorder in itself. Pathological liars often lie even when there is no obvious benefit from doing so. Fraud may also be linked to ‘impulse control disorders’ like kleptomania and compulsive gambling.
Malingering and diagnosis evasion
There have been documented cases of ‘malingering’ by fraud offenders. That is, faking psychiatric symptoms in an attempt to avoid being brought to justice.
On the other hand, it is well known among mental health professionals that many high functioning individuals who exhibit all the signs of having a personality disorder manage to avoid diagnosis and treatment. This makes it very hard for them to receive the treatment that may benefit them.
Mental illness as a defence to fraud
Whilst insanity can be run as a full defence to most criminal offences, the mental disorders most often associated with fraud (such as personality disorders) are generally not sufficient to amount to the defence of mental impairment and negate criminal responsibility. For the defence to succeed, the court must be convinced that the accused person:
- Did not know the nature and quality of their conduct; and/or
- Did not know their conduct was wrong or could be perceived as wrong by a reasonable person
The law recognises that a person should not be held criminally responsible they lacked the capacity to form a criminal intent at the time of the offence. Defendants are presumed not to be suffering from a mental impairment, but mental impairment can be raised by a party during the course of a trial.
Offenders who have personality disorders – for example, Narcissistic Personality Disorder – have sought unsuccessfully to defend fraud charges on the basis of insanity. Personality disorders are persistent maladaptive patterns of thinking, acting and being and are generally not sufficiently serious impairments to fulfil the legal test for mental impairment. Consequently, these offenders are generally dealt with through the criminal justice system and given sentences that are not designed to address their mental health issues.
The relationship between mental illness and fraud is under-researched. Academics have pointed out the need for more research into this relationship as greater knowledge would help courts to better understand the root causes of this type of offending and to structure sentences that address underlying psychiatric issues driving fraud offending.
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